Street Capitalist: Event Driven Value Investments

Guy Spier of Aquamarine Capital Management is someone I’ve been wanting to read more about and learn from. He doesn’t appear in the news as much as other value investors, so I was really surprised to see an article written by him in Time magazine today:

Buffett has always made a point of doing business with integrity — and of working only with people who share his values. As we learned at lunch, he credits his father with teaching him early on to rely on his own sense of what’s right, rather than looking for affirmation from others. “It’s very important to live your life by an internal yardstick,” he told us, noting that one way to gauge whether or not you do so is to ask the following question: “Would you rather be considered the best lover in the world and know privately that you’re the worst — or would you prefer to know privately that you’re the best lover in the world, but be considered the worst?”
When it comes to investing, nothing is more important than the ability to think clear-headedly for oneself — and Buffett is unsurpassed on this front. In the late-90s, he was widely criticized for his refusal to invest in booming tech and Internet stocks, a decision that was richly vindicated when the bubble burst. Buffett has made a fine art of keeping this kind of distracting noise at bay: for example, he said he even limits his contact with the managers of businesses in which he invests, preferring to assess them by studying their companies’ financial records —a more neutral source of information.

My $650,100 Lunch with Warren Buffett (Time)

The whole article is worth reading and I think it shows us one of the reasons Buffett is such an interesting character to study and learn from. The fact that he takes such a hands off approach to is businesses is pretty remarkable. He really has an uncanny ability for picking CEOs to operate businesses who are truly passionate about their work which is a quality that you can’t pluck out of an MBA.

To contrast this, look at Edward Lampert of Sears. He gets a lot of comparisons to Buffett, but when it comes to attracting talent they’re worlds apart. Lampert has been unable to find the right managers to run the businesses and brands within Sears and I think it’s one of the key factors that is holding down the company’s turn around. Maybe in that situation the “people” input is simply not being given the weight it deserves.

Guy Spier’s account seems to show us that the real wisdom that can be gleaned by Warren Buffett is how to measure and judge character and people, something that is a product of decades worth of relationships and experiences. That seems to make a $650,100 lunch or even $2.11 million lunch worth the expense if you get just some of the insights of a lifetime in just a lunch at Smith and Wollensky’s!